Private-label products or services , also known as "phantom brands," are typically created or provided by one company to be offered with another company's brand. Personal label goods and services are available in a variety of industries ranging from food to cosmetics to web hosting. They are often positioned as low cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands.
Growing market share and increasing the variety of personal label consumer packaging items is now a global phenomenon. However, private label market share shows a wide diversity in international markets and product categories. Empirical research on private label products has attracted academics and marketing managers. Considerable work has been done on well-defined private label research fields such as private-label brand strategy, private-label product market performance, competition with national brands, market structure, and buyer behavior.
For example, Richelieu Foods is a private-label company that produces frozen pizza, salad dressings, spices, and spices for other companies, including Hy-Vee, Aldi, Save-A-Lot, Sam's Club, Hannaford Brothers Co., BJ's Wholesale Club (Pride Earth brand) and Supermarket Shaw (Culinary brand of Circle). Another example is Cott Corporation, which produces private-label drinks for supermarket chains. McBride plc is a provider of home and personal personal care products based in Europe.
Video Private label
Private Labels Manufacturers Association
Private Label Producers Association (PLMA) in the United States categorizes private label manufacturers into four categories:
- Large national brand producers who leverage their expertise and factory overcapacity to supply store brands.
- Small and qualified producers that specialize in a particular product line and concentrate on producing store brands almost exclusively. Often these companies are owned by companies that also produce national brands.
- Large retailers and wholesalers have their own manufacturing facilities and provide their own brand store products.
- Manufacturers of regional brands that produce private label products for specific markets.
Maps Private label
Usage
Outsourcing
Some companies source products from specialized contract manufacturers or contract packers, who may or may not own their brands, as building their own production facility will require major investments in equipment, human resources, and patents. Sources from specialized companies that have made such investments and also have reserve production capacity can be a viable alternative. If both companies find that the market situation allows them to avoid or minimize the direct competition and they do not steal market share from each other (cannibalization), then the company can reach agreement in which the special manufacturer supplies the goods to others. Methods to reduce cannibalization are general marketing practices such as dedicated distribution channels, different image and customer perceptions of separate regional brands, prices, and presence. The same basic concept applies to the service industry (eg, customer service channels).
Market entry
Personal labels may be behind the decisions of some companies to enter markets with very different products, but somehow can be attributed, to products that have made them famous (eg, clothing companies launching perfumes, car companies launching watches). Personal labels may be very profitable for companies with dominant market share and for certain products that enjoy high customer recognition.
Safety and quality
As advanced technology becomes widespread (and even subsidized) in developing countries, the source of a wide variety of products can be made at a very low cost. This same product may have a price that allows a net margin for the account up to several times the cost of the item being sold. Customers may be unaware of this business practice and may pay higher prices for products slightly different from others with lesser-known brands. On the other hand, some companies provide additional warranties for these products that offer better quality, customer support, and additional services.
Private label products are generally sold in many countries, so it's important that all high-quality products adhere to all relevant single or global market standards, including sustainability and environmental impact. This can be done by certification and audit, inspection, hygiene monitoring, and food, beverage, and packaging testing.
Use by small company
The use of private-label products by small companies has grown. Small companies usually have no input whatsoever in the recipe or packaging of the products they buy. They buy from specialty food companies that use their recipes and simply label for individual retail stores. Small companies do this for advertising benefits. For example, if John Farm Market sells jam or salsas, every time a consumer uses the product, they are reminded of their visit to John Farm Market, where they must return to buy back. This brand is also useful when the product is gifted, as it enables the gift recipient to become another potential customer. In recent years, Amazon has become a popular channel for small companies to launch private label products, where nearly 500,000 products are released every day, many of which are private label products. By leveraging Amazon's FBA infrastructure, small companies can launch private label brands without having to invest in any storage facility.
Benefits
There are various advantages for retailers to use private label brands:
- Product or service price control
- Marketing independence
- A personalized image (and higher customer loyalty)
- Higher production, marketing, distribution, and profit control
- Personalized entries like logos and slogans
- Change customer preferences
These advantages provide excellence over other brands, which help create a personalized and unique brand for retailers. Retailers with a pretty good private-label brand will be able to create better sales opportunities for themselves. They can build value and recognition from customers. Private branded products allow retailers to differentiate their products from competing products, and provide alternative consumers with other brands.
pet food 2007 remember
In 2007, there was a withdrawal in the United States of over 60 million pet food cans sold under more than 100 brand names made by Menu Foods. Mass withdrawals lifting the curtain on common practice in competing brand products are often made by the same manufacturer. However, materials, design and quality can differ substantially between labels created under the same umbrella.
See also
- Personal Label Strategies
- Badge Technique
- Copacker
- Shop brand
- White label product
References
External links
- Media associated with Private labels on Wikimedia Commons
Source of the article : Wikipedia
0 Comments